Recently, the social media space has been buzzing with the market crash with a focus on Terra Luna’s unexpected price drop. The native token $LUNA and the stablecoin $UST suffered major price crashes for several factors.
$UST, which was prevailing at $90c earlier this month, came down to $45c, and $LUNA, which was at the high of $85, reached a low value nearing zero. As users need to burn $LUNA to mint $UST, their price sent a shock amidst all the investors. This price drop also made government authorities and community members reconsider the stability of stablecoins.
However, recently the United Kingdom’s Department of Treasury has reportedly taken a positive stand in regulating stablecoins as legal tender.
UK’s Stand for Stablecoins
A local report highlighted that the Treasury intends to regulate stablecoins across Britain, which was revealed by Prince Charles during the Queen’s speech. Prince Charles mentioned the introduction of new legislation across the various sector, including new measures to drive economic development to improve living standards,
He said, “A bill will be brought forward to further strengthen powers to tackle illicit finance, reduce economic crime and help businesses grow [Economic Crime and Corporate Transparency Bill].”
Earlier last month, the UK’s Economic and Finance Ministry Department also cited an amendment for its existing regulatory framework to incorporate stablecoins as a form of payment. This news was welcomed by the crypto community as they recovered from the shock of Terra’s price crash. However, the UK Treasury is maintaining a firm stand mentioning,
“to ensure the UK financial services industry is always at the forefront of technology and innovation,”
The Treasury’s plan does not involve legalizing algo stablecoins and will only offer support for fully-backed stablecoins such as USDT or USD Coin. The spokesman for Treasury said,
“Legislation to regulate stablecoins, where used as a means of payment, will be part of the Financial Services and Markets Bill which was announced in the Queen’s Speech.”
With the UK taking a positive stand for stablecoins, the industry sticks to the silver lining amidst the crash. As more and more countries are taking a positive stand for digital currencies, the industry hopes for a quick recovery and brings more innovation to the table.